The building will be the first at ProLogis planned distributionpark west of the city along the country's primary transit corridor,the A1 Motorway. Onofrei says ProLogis is developing the parkbecause the supply of modern distribution space in Bucharest isalready constrained--vacancy is between 2% and 5%m he says--anddemand is expected to increase due to strong GDP growth, increasedlevels of domestic consumption and the country's recent entry intothe European Union. The facility is scheduled for completion in thefirst half of 2007.

Kuehne + Nagel is one of ProLogis' largest global customers.ProLogis did not reveal the negotiated terms of the deal. Theaverage lease rate for modern distribution space in the regionranges from euro $4.20 to euro $4.80 per square meter.

ProLogis Park Bucharest is located 14 miles from downtownBucharest. Keune + Nagel's building is one of two similarly-sizedbuildings currently under construction. The park is designed toaccommodate 3.4 million sf in 12 buildings.